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Tata Steel has moved a step closer to striking a £100 million deal which could save dozens of jobs in the Black Country.

The steel group, part of the same conglomerate which owns Jaguar Land Rover, has been trying to offload its loss-making UK arm since March and today signed a so-called 'Letter of Intent' with commodities trading firm Liberty House.

This means the two companies will enter a period of exclusive negotiations for the potential sale of Tata's 'speciality steels' business for an enterprise value of £100 million, including its service centre in Wednesbury where it employs around 50 staff.

The letter also covers several other sites in South Yorkshire, Bolton and a pair of plants in China but it does not include its coated narrow strip plant in Walsall.

The speciality steel division employs around 1,700 people, making steel for the aerospace, automotive and the oil and gas industries while around 800 people are employed across the two plants in Wednesbury and Walsall.

Tata Steel previously said it had been hit by the high costs of manufacturing and climate change policies along with cheaper foreign imports flooding the markets.

Tata Steel UK's chief executive Bimlendra Jha said: "The speciality steels business is independent of the pan-European strip products supply chain and today's announcement is in line with the overall restructuring strategy of the UK portfolio.

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"This is an important step forward in seeking a future for speciality steels and we have reached this stage thanks to the efforts of employees, trade unions and management.

"We now look forward to working with Liberty on the due diligence and other work streams so that the sale can be successfully concluded.

"We continue to actively seek solutions to the company's structural challenges and work with all stakeholders......there is the need to develop a more sustainable business in the UK as well as a self-sustaining future for the British Steel pension scheme."

Tata Steel UK said it had invested £1.5 billion of capital over the last nine years and the company was pursuing a transformation plan to create a sustainable future for its UK strip products business.

Trade union Unite has today called for an independent audit of the planned deal with Liberty House, saying it is concerned about job security and the future of the pension scheme.